Margin of Safety Battlecards
Recall how margin of safety protects an investment thesis from valuation error and adverse surprise.
Core recall What is margin of safety in investment analysis? The gap between estimated intrinsic value and the price paid. The gap compensates for forecast error, adverse surprises, and model uncertainty. Do not confuse these Fair value versus buy price The wider the uncertainty, the larger the gap should be. Committee objection If we wait for a bigger discount, we might miss the stock. The thesis is attractive but the value range is wide. Your line Missing a stock is not the same as losing capital. If the thesis needs perfect assumptions at today's price, the risk-reward is not yet…
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